Can Moneyball help inspire a new era for human resources?

Let’s begin with two rather unusual starting points for these types of articles, both linked to the world of sport: Moneyball – the book, not the 2011 movie – and Burgos BH, the UCI ProSeries elite cycling team based in Spain. They share a common trait: the use of alternative, and mostly data-based, methods to hack the traditional systems their championships used.

Many people will remember Brad Pitt in the role of Billy Beane, the general manager of the Oakland Athletics baseball team, in Moneyball. But not so many will know what the real Beane achieved in 2002 – or what is detailed in the book that went on to inspire the film.

Following a change of ownership, Oakland Athletics found itself with a smaller budget to spend on players. With limited financial resources compared to other Major League Baseball (MLB) teams, Beane decided to embrace an innovative approach based on statistical analysis and the application of advanced metrics to evaluate player performance. He and his assistant, Paul DePodesta, analysed the data to identify undervalued players.

Beane was challenging conventional wisdom and prioritizing data that he deemed more relevant for the team’s success – so he became the target of criticism from the establishment. His experience highlights common issues within the business world, such as the resistance to change within institutions and the tension between analytical and conventional methods. Yet, it also shows how innovative ideas can transform established industries. This is something that has had a significant impact in non-sporting domains where data-based decision-making has become crucial.

Two decades later, a small Spanish cycling team has been exploring ways of challenging UCI rules and, in the process, signing talent from countries that have a limited cycling tradition. Their newest additions, who were all relatively unknown, have included cyclists from Guatemala, Greece, Mongolia, and New Zealand, which will give the team the kind of diversity that wouldn’t have been considered in other circumstances. All of this, in theory, could make the team look weaker than its rivals.

Why did they do this? The explanation for taking this action lies in new UCI rules, which require European teams to rank among the top 40 in the world if they are to be invited to the major cycling tours, including the Tour de France, La Vuelta in Spain, and the Giro d’Italia, as well as the “classics.”

The UCI ranking system works by totting up the accumulation of points from each competitive appearance. Top-tier teams compete together en masse in the most prominent events on the European calendar, making it difficult for cyclists from smaller groups to rack up points. This is why Burgos BH has opted to look outside Europe, particularly to Asia, so it can pick up points in territories that other European teams don’t even consider.

Can this be applied to hiring staff for companies?

Knowing that taking an analytical approach can work so well in the world of competitive sports, the question is whether it can work in business too. So we asked Raúl Antón Cuadrado, the people analytics lead at Automattic, the parent company behind Wordpress.com, for his opinion. Cuadrado lives in Aranda de Duero, a small town in northern Spain, despite having an international position in a company whose entire workforce is dotted across the globe. Remote working was fully implemented at Wordpress long before the pandemic.

Not only has he been giving talks and writing about remote leadership for years, but he also practices it daily. And, he’s arguably one of the most qualified voices in his role as remote talent manager to comment on whether these strategies can work in an industrial setting.

Spoiler alert: He doesn’t think they can. That’s because although data can be handled more effectively and the profile of a potential employee can be analyzed differently from the way it was 10 years ago, the challenges of finding data sources that are reliable, legal, ethical and usable for the purpose of anticipating the performance of future workers as suggested by these methods, would make these efforts – at least for now – futile. He also doubts whether this would represent a legitimate way of choosing potential employees and believes that it would be unethical and close to illegal to do so for most positions.

These sentiments are echoed by an artificial intelligence (AI) executive at a major tech company, who asked to remain anonymous for this article, and who has considered the implications of a company opting for a recruitment process based on digital profiles and the information these provide.

“Nowadays, doing this wouldn’t just be possible but completely viable. The data’s there,” he argues. “We just need to harvest it and process it. In fact, most of it can be easily found on professional social networks. However, what we get from them is difficult to authenticate in terms of job performance or specific skills.”

When it comes to online descriptions, there is no guarantee that all the information listed is true. “Everyone defines their own skills, but in reality, you don’t know if they’re real,” he says. In addition, he points out that the latest European regulation specifies that AI cannot be used for certain things involving a person’s public profile. So, it’s advisable and “necessary to respect ethical standards and the current regulations in each region,” he says.

There is another way to use information found online. “It’s possible to base your reports and arguments not on what is shared in the professional part but on the posts created and shared, where many more things are displayed than in traditional resumes,” he says, adding that this won’t work on every potential candidate. “However, it’s important to understand that, despite all this, the 90-9-1 rule still prevails,” he says. “This is to say that 90% of people never share anything on their feed, 9% react to what others post and only 1% regularly generate their own content.”

He believes such a practice would be feasible – especially in companies with a high volume of interviews and recruitment processes over the years – “by basing it on the people they’ve already interviewed or previously hired. This is because converging here is a data series that has been verified by the company during personal conversations or through a series of professional tests.”

Carla Gil, head of people and culture at PropHero agrees, though her company has chosen not to rely on analytics. “We don’t tend to use these new processes to spot new talent. Instead, we prefer to nurture talent internally once we’ve found people with key skills,” she says. “In fact, we’re more concerned about attitude or willingness than evaluating daily tasks and we believe that this is difficult to measure on a technological level.”

What do HR departments think about the advance of AI?

You only need to run a quick search of the terms HR and AI, and you get literally thousands of articles, webinars, and talks which assume that AI will be an inevitable aspect of HR in the near future. Many of these articles put forward similar ideas: AI is expected to help automate routine tasks, improve efficiency in certain processes, such as hiring and selecting personnel, and to obtain more accurate data analysis for strategic decision-making for talent management.

There are many examples of major companies implementing initiatives in this respect. LinkedIn is set to launch a tool that will filter user profiles based on skills and experience, generating summaries to complete their personal descriptions. L’Oréal and Unilever have incorporated artificial intelligence into their hiring processes. McDonald’s has added AI tools to its selection processes and is using a chatbot in interviews to cut down on the time spent in hiring given its high staff turnover. And Workday is using AI in its HR department to proactively identify any employees who could be about to leave the company, implement retention measures and plan for new selection processes.

But let’s talk about people – since this is an article about HR. We spoke to Daniel Lorenzo, national director of public affairs at the multinational recruitment agency Randstad in Spain, which not only connects workers with companies but also strives to ensure that this match between both parties is as satisfying as possible. “We don’t talk about whether AI will create or destroy jobs,” he says. “We base our [ideas] on our experience but also on the World Economic Forum report . . .” It states that 23% of jobs will see changes over the next five years and that on average 44% of an individual worker’s skills will need to be updated.

Lorenzo points out that his company is working on “being able to spot the new skills required by the market so that we can offer our clients applicants suited to today’s reality while conducting AI-based recruitment processes to filter skills and find the best candidates.”

All of this is also laid out in the Randstad Research report on HR Trends. For example, 82% of organizations planned to implement technological innovations in 2023, and 65% said they’d opt for new working models and guidelines.

What do those using AI say about the future?

Yunior González is the chief executive of Squaads, a start-up whose main focus is on creating digital products that use these formats to optimize online growth for its customer companies around the world. González says 2024 will be the definitive year of change with the consolidation of ChatGPT, the arrival of BingGPT and, particularly, Bard by Google, which is the world’s most used search engine and, therefore, the AI tool that most people will naturally adopt. This won’t just be down to the use of AI but also due to the transformation surrounding it, both for employees and the work they’ll have to do. And also how companies will reconfigure their teams.

“When new people who know how to use these types of tools come in and manage to reduce the time it takes to build an e-commerce product from three days to three hours, there will be a snowball effect,” he says. “This won’t mean there will be layoffs but that many agencies and small companies will be able to gain market share quickly, doing the same thing faster and, therefore, accessing more clients.”

Unlike those predicting a reduction in workforces, he believes that existing staff will be kept on as greater efficiency will allow for greater productivity. “You won’t aim to continue with the same volume but to increase it with the same staff due to the opportunities you’ll have,” he says. “This applies to hiring young people and also senior candidates, who are able to learn on their own.”

He ends with the following reflection: “There could be a Moneyball moment because techies won’t just be people under the age of 30,” he says. “So by detecting skills, you could bring together a team made up of people with greater experience, who will also bring different skills, and also disruptors, who are capable of completely leveraging the revolution unfolding right now.”

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